The fact is they are engaging in unlawful acts.
They are also highly unlikely to become customers, as they are now habituated to accessing their music without paying the supplier.
Finally, we keep hearing about the RIAA and the fat cat labels, but continue to downplay the average musician and the crappy situation they've been pushed into by (let's face it) illegal downloaders.

Dude, I'm not going to argue with you. If you want to go ahead and eliminate a generation of people from your potential market, well, go for it. Not the smartest business decision you could make, but whatever. Talk about short sighted.